WACC
Weighted Average Cost of Capital
Risk & PortfolioThe average rate a company pays to finance its assets, weighted by proportion of debt and equity in capital structure.
Formula
WACC = (E/V × Re) + (D/V × Rd × (1-T))
Why it matters
The hurdle rate for new investments. Projects must earn above WACC to create value. Used in DCF valuations.
Indian example
Related terms
Learn the concept
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